Borrowers crippled in 2010

Staff Reporter

Australian households paid financial institutions $3.86 billion more in 2010 than in 2009 thanks to increased interest charges.

According to recent research by RateCity, more than $3.47 billion of the total amount came from increased mortgage repayments.

Using the average mortgage size of about $300,000, RateCity calculated that variable mortgage holders paid an extra $1,615 in interest on their home loans in 2010.

But RateCity’s consumer advocate Michelle Hutchison said these results were not surprising.

“We’re not surprised by the RateCity comparison of how much money households have had to pay for rising interest rates over the past year. Not all of this $3.9 billion will go towards banks’ profits because the cost of funding loans has also increased including the Reserve Bank of Australia lifting the official cash rate by 100 basis points to 4.75 percent,” she said.

 

Staff Reporter

Australian households paid financial institutions $3.86 billion more in 2010 than in 2009 thanks to increased interest charges.

According to recent research by RateCity, more than $3.47 billion of the total amount came from increased mortgage repayments.

Using the average mortgage size of about $300,000, RateCity calculated that variable mortgage holders paid an extra $1,615 in interest on their home loans in 2010.

But RateCity’s consumer advocate Michelle Hutchison said these results were not surprising.

“We’re not surprised by the RateCity comparison of how much money households have had to pay for rising interest rates over the past year. Not all of this $3.9 billion will go towards banks’ profits because the cost of funding loans has also increased including the Reserve Bank of Australia lifting the official cash rate by 100 basis points to 4.75 percent,” she said.

 

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